CLP Beacon - Business Issues and Solutions

Thursday, January 7, 2016

What Makes a Company Great?

I was at a very interesting meeting hosted by Brett Olinger and
Susan Howington, founder, Power Connections on Dec. 16, 2015. There were about a dozen high level
executives around the table with titles ranging from VP to COO to CMO to
CEO. Susan got us together to talk about
business issues and she asked a relatively simple question: What makes a
company great? And the subordinate theme of what kind of company would you want
to work for or build?

As a tech executive and one involved in the entrepreneurial
eco-system in southern California, I would have imagined that I would hear
about things such as the latest and greatest technology that captures people’s
hearts and minds. Or maybe I was hoping
to hear about the great opportunities for career advancement or companies doing
social good.

I did not hear of specific industries, technologies,
functions, unique characteristics of the leaders or anything that you might
glean from an employee survey. Remember
the ones commenting have been and are successful executives. After listening intently – and contributing
as well- I captured their thoughts into three areas: Culture, Leadership, and Customer Focus. And I have to admit that is probably the
order of importance because to me, culture is a platform upon which to build
and enact leadership and a customer philosophy.
As you read the following, just ask yourself about the companies for which
you worked. What made them good? Why did you like coming to work? What drove your passion? What made these companies great for you?

Culture

Culture was the number one item. Culture was a necessary but not sufficient
condition for making a company great.
Think about Tony Hsieh of Zappos.
He has instilled a clear culture in that company that focuses on the
customer. Do what is right for the
customer. Certainly his vision and bent is the customer. But without a cultural underpinning, Zappos
would not be as successful as it has been.

Culture is also unique to a company. It is hard to duplicate and is normally set
by the CEO. Think about other companies
that are successful and have a truly unique culture. Think about Disney and the culture about Imagineering. Think about Intel and the culture of
innovation. Think about 3M and their
culture that they encourage people to invest their time on new ideas. Without a culture of innovation and support
for innovators, many companies may not achieve success.

We discussed other components of culture as well. Those components included telling it like it
is……. but respectfully and constructively.
(As an aside, I can certainly relate to this coming from Brooklyn, NY
and have seen direct cultures like New York and oblique cultures like I have
seen in the Mid-west.) Another element
was pushing employees to the next level, i.e. making them believe they can
succeed and giving them opportunities to succeed. In the process of encouraging people, the
culture must also accept failure (fast failure is preferred) and must set up a
reward system for those that are successful.

Culture is also critical as the underpinning of being
customer focused. Think about a company
that is just focused on the bottom line versus a company that is trying to help
a customer and wanting them to be happy.
Think about your experience with Zappos.
Or if you have web service or webhosting from 1and1, think about the
great customer service you have received from them. Was it easy to talk with the company and its
reps? When they talked with you did you
believe that you were the only person in the world on their mind or did you
feel that you were imposing by asking them a question? We heard a story this morning about how
Steve Wynn chose people to work for him.
Applicants were told to go to another part of the building and when they
got there, Steve was sitting behind a desk, rose to greet the applicant and
wanted to see their reaction. If they
were friendly and responsive, they were hired.
True? I am not sure but it makes
a good story.

Leadership

We all know that leadership is critical. Leadership starts with the CEO and filters
down to people in the organization. The
leader sets the culture. When I was head
of marketing at US Cellular, our founding CEO, Don Nelson, was a great
leader. He selected an eclectic group of
people, set the objectives and measured results meticulously and
religiously. But what distinguished him
was his willingness to listen to his people, set and change vision and set a
clear direction for the company.

The
result, during my tenure was that the company grew fourfold in revenue in only
five years.

Think back to the CEOs and possibly mentors you have had in
your career. What has distinguished
them? This morning, the executives
around the table believed that not only did the CEO establish and set the
culture for the company, in essence being the chief culture officer, but also
set a clear and compelling vision for the company. As the Cheshire Cat said, “if you don’t know
where you are going, any road will get you there.” Leaders know where they are going.

Coupled with the vision is the ability to articulate the
clarity and alignment of the messages across the entire company, and in my
humble opinion, do it in a personal way.
As companies grow, become more complex, and are geographically
disbursed, having a common vision and alignment of messages are critical to
ensure everyone is marching in the same direction. In this case organizations become both
effective in generating profits (the end game for most) and efficient in doing
so.

The group believed that a great company has a
servant-leader. A servant-leader focuses primarily on
the growth and well-being of people and the communities to which they belong. By focusing on people first, it empowers
employees to be successful. It also has
a mentoring quality enabling employees to trust the leader such that when these
employees are pushed to success by the leader, they trust that their best
interests, and in turn the company’s, are aligned. To be a true servant leader, two other
elements must ring true. The leader must
be authentic and must be transparent.
There should be no hidden motive or ego at play.

Customer Focus

As a businessman and marketing
executive, I have written extensively and talked about customer focus. The customer, the one who buys your company’s
products and services, must be foremost in your mind. Companies who are customer focused truly
understand the behavioral drivers of the customer and why they buy your
products and services.

The executives at our meeting
believed that great companies connect with the customer. These connections may come from a better user
interface, or the way they train their front line people to interact with
customers. We bandied about the
concept of Customer Experience Officer because customers, who are not happy,
not satisfied, become disloyal. And,
all of us recognized that retention of customers is critical to a company’s
success. Further if you connect with the
customer and relate to the customer, if a company makes a mistake there are
positive “chits” that have accrued over time and forgiveness by the customer of
any faux pas is normally granted.

Note that customer focus relies on a
specific culture. Again, think back to
Zappos or think about any experience you have had at a retail store or an
online store. Systems are critical to
help achieve customer focus but in reality it is the people, those front line
sales people and customer support people that guarantee that the customer is
important. Most of us go to Starbucks to get coffee. Think about your experience. They ask your name and if you visit the same
store more than a few times, the baristas and others will get to know you. How do you feel? Pretty loyal I would assume.

Starbucks, Zappos, US Cellular and
other companies have realized something very critical. The people who interact with the customers
ARE the brand. Leadership sets the
vision and a customer centric culture is established. Yet customer focus is executed by the people. All of us agreed that great companies are
those that have this passion for the customer, exercised by supporting a
customer first philosophy on the front line.

Going back to the original question of What makes a company great, it comes down to three
areas: culture, leadership, and customer
focus. All three are interrelated. In short, great companies balance the needs
of customers, employees, and owners. What
companies would you want to work for?
What makes a company great in your mind?
My partners and I will be glad to talk with you about your business issues and help you set a course so your company can be "great" as well.

For more thoughts and ideas, feel
free to contact me at dfriedman@clevelpartners.netor visit us at www.clevelpartners.net. I will
also guarantee that if you write or call me, I will pick up the phone and talk
with you. Why? Because we, too, love our customers and we
have implemented a culture in our company of helping and sharing.